Nov 08 2010
SA art galleries: Coping with the recession

SA art galleries: Coping with the recession

“The game has changed”
by Patrick Burnett
The depressed worldwide economy has scoured a mark on South Africa art galleries – and there appears to be little relief in sight.
Two years ago a booming art industry was seeing itself as largely recession proof, but this idea has since been blown away as cash drained out of financial markets following the US sub-prime crisis two years ago. “The big issue is to stay alive and keep your head above water. Right now it’s quiet, there are less feet coming through,” said the owner of one art gallery. The picture is not uniform, however. Larger, well capitalised art enterprises targeting the top end of the market seem less concerned about talk of recession. And record sales – at least for works by the “old masters” – still make headlines.
An Irma Stern still life sold recently for a staggering R13 368 000, setting a new record price for a South African painting at auction. The auction, conducted by Strauss & Co, featured several works which sold for over R1 million rand each. But many gallery owners can only dream of sales like these and are in battle mode.
Worldart owner Charl Bezuidenhout said even though the recession had an impact, it was difficult to tell how much of an impact because “you cut down a bit, get lucky or work harder”. But while in the past he had someone on the floor of his gallery, he was now on the floor. And he had decided not to renew his lease on a Johannesburg property. João Ferriera, the owner of the João Ferriera Gallery, said the recession had affected turnover and decisions on exhibitions – which were down. “We have had to cut back on everything: international penetration at art fares, reduced staff levels and promotion.” Also facing down the crunch has been institutions like Johannesburg’s Artist Proof Studio (APS) – considered to be an incubator of young talent. Director Kim Berman said APS had lost much of its core funding for 2010.
Thirty-five new learners had been accepted in February 2010, but there had been no bursaries to cover fees and students had struggled with transport costs. “We had enough funding to last up to June 2010,” said Berman. Mary-Jane Darroll, Executive Director at fine art auctioneers Strauss and Co, said she thought the recession had had an impact. “The broader market is that money is definitely tighter.”
But she also cautioned that this depended on which market area was being examined. She said over the last five years new auction houses had entered the market and therefore overall spend had increased. “Overall it is difficult to know if the market has actually dropped,” she said. She said Strauss and Co were still seeing record prices – like that for the Irma Stern still life – with the area doing well being the top 1% of artists.
Decorative works in the R30,000 to R50,000 price range had been down, but works of quality were still seeing “a lot of interest”. Michael Stevenson of the Michael Stevenson Gallery in Cape Town expresses a similar sentiment. “We have not changed our programming or our commitment to artists in any way because of the ‘recession’. There are always serious collectors and curators and museums, in SA and internationally, interested in work that has validity and integrity, irrespective of the economy.” There are some positives to tough economic times, it appears. Bezuidenhout said the changed business environment opened up the possibility for experimentation. “That’s great because it forces you to do things, takes you out of your comfort zone and hopefully the knowledge gained will help when times are better.”
At APS, Berman said the board of directors had met to design new strategies for sustainability and to reduce reliability on outside funders. This had led to a fund raising art evening and dinner that had raised a potential R1.7 million. In addition, a team of 10 risk managers and staff from Deloitte had been sent in as part of a corporate social investment initiative to do a systems audit and design process flows to improve efficiency and management systems. At Straus and Co, Darroll said there had been no specific change other than a “clear direction in selling the very best works that we can find. We are trying to be discerning in what we put on offer.” Views are mixed on how long the economic dip might last.
Ferriera said while there had been “a bit of movement in the decorative market”, there was little movement on the financial markets and so it was not clear where the money to rejuvenate the sector would come from. In the meantime, the focus would be on finding new markets, developing collections and carrying stock that “has the distance”. Ferriera said while people were saying it was “really slow” and a negativity had slipped into the market, people had previously survived recessions
and depressions. “At the same time the deals are not there and that’s almost scary because the collectors feel they are being over approached.” Bezuidenhout’s time frame is another two years. Survival would depend on “how deep your pockets are” and how creative businesses could be in terms of savings and re-negotiating things like rentals.
“The game has changed,” he said.

Article published by The South African Art Times, November 2010.

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